“Trading Ranges” Explained, A YoYo Market

Lately, the capital market indexes have been in what trendy cool professionals call a “trading range.” We being neither trendy or cool, prefer the term “Yo Yo Markets.”

Remembering your childhood days of that fun handy toy the “Yo Yo” (I spent many hours with said toy, probably sparking the thought of our nick name, but that is another story..haha.)

The “Yo Yo” goes up and then back down again, over, and over, often times slightly different lengths than the prior time, however there is a definite limit to how far it goes down (end of the string) and up (to your hand.)

Certainly we have moved down in the capital markets dramatically since the beginning of the month, which is of course concerning. We are watching this closely, however, we are currently we are in a “YoYo” market, this could change at any time, but here is the catch. Our “YoYo” market grabs huge headlines on the way down, i.e. “Dow Down 500+ Points …” This has the possible result of making us feel bad, and maybe worse than reality. It is human nature to feel worse during bad times than good, and with the terrific splashes of negativity, it is only normal that the headlines stick, at least a little bit.

Do not bite, negative emotion is our worst enemy during trying times, which we are currently in, but if you are not careful, you may accidentally allow them to be worse than reality.

Have a Great “YoYo” Less Monday, as Capital Markets move back toward the hand !

JK

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